Retail Industry News from IRI
-Week Ending 8/1/08-
Below is the list of articles you will find for the week ending 8/1/08 edition of Retail Industry News.
► Aldi Finds Good Times In US Hard Times
► Seattle Imposes Disposable Shopping Bag Fee
► FTC Releases Report On Marketing To Kids: “Long Way To Go”
► MNB’s Tales Of Tesco
► Sansolo Speaks: Common Sense Solutions
► Fresh Seasons To Double Store Count
► FastNewsBeat Thanks to MNB
► The MNB Wal-Mart Watch for this selection of
► The Balance Sheet articles.
► Executive Suite
Aldi Finds Good Times In US Hard Times
If you don‟t get aggressive in reacting to tough economic times, the odds are pretty good that your competition
will.
The Milwaukee Journal-Sentinel reports that Aldi is a prime example of a company that is taking advantage of
the declining US economy to build up its own operations: “The low-profile, no-frills German grocery chain sees
opportunity in the sagging U.S. economy, and Aldi is stepping up both its U.S. expansion plans and its profile.
Aldi recently ran a batch of TV ads after staying off the airwaves for 15 years. The company also has loosened
up and started talking with the media, reversing a longstanding policy of not taking calls from reporters.”
The paper notes that while the limited assortment chain doesn't release sales figures, the National Retail
Federation's Stores magazine ranks the chain 91st in size among U.S. retailers, with sales estimated at $3.6
billion.
And the formula is both basic and consistent – Aldi carries fast-moving basics and commodities, doesn‟t take
checks or credit cards, and if you want a bag for your groceries you‟d better bring your own. The message from
start to finish is about savings…and it is one that Aldi believes will serve it well during a well-timed US
expansion.
Seattle Imposes Disposable Shopping Bag Fee
The Seattle Times reports that the City Council there has voted 6-1 to approve a 20-cent charge on all
disposable paper and plastic shopping bags that are provided by supermarkets, drug stores and convenience
stores.
According to the Times, “City officials estimate Seattle citizens use 360 million paper or plastic bags each year.
By a vote of 7-0, the council also approved a two-part ban on certain Styrofoam containers. The bag fee and a
ban on foam containers for food from takeout restaurants will take effect in January. A ban on foam trays used
for raw meat and seafood at grocery stores is set to take effect in July 2010.”
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Retail Industry News from IRI
FTC Releases Report On Marketing To Kids: “Long Way To Go”
The New York Times reports that the US Federal Trade Commission (FTC) issued a report yesterday “detailing
the pervasiveness of food marketing to children,” saying that “food companies had spent $1.6 billion to market
their products to children and teenagers in 2006,” expenditures that contributed to the nation‟s burgeoning
childhood obesity rate.
However, an industry coalition called the Children‟s Food and Beverage Advertising Initiative responded by
issuing its own report showing that self-regulation rather than legislation was the best way to battle childhood
obesity. While the FTC credited the industry group for making progress, the Times notes that one government
concern is “the lack of industry wide definitions on what advertising to children entailed and on what „better‟
food meant.”
According to the Wall Street Journal story on the subject, “While the commission noted that most major food
marketers have made significant strides to create healthier products and promote good nutrition, it said the
industry still has a long way to go. Beverage and fast-food marketers in particular will likely face some of the
harshest scrutiny going forward, as the two sectors represent some of the biggest ad spenders targeting kids,
analysts say.
“In a separate statement, FTC Commissioner Jon Leibowitz said there needs to be a better way of figuring out
which shows children are watching. While much of the outcry until now has been directed at shows on youth-
focused networks such as Nickelodeon, he says other shows also have significant youth viewership‟s,” such as
“American Idol.”
MNB’s Tales Of Tesco
• Tesco announced yesterday that its US division, Fresh & Easy Neighborhood Markets, has opened its 67th
store, a unit in Phoenix that is its 20th store in that market. At the same time, Fresh & Easy said that it has four
more openings planned for the Phoenix market, all of which will take place between now and September 10,
2008.
Sansolo Speaks: Common Sense Solutions
by Michael Sansolo
No matter where you stand in the political spectrum, you have no doubt paused for a moment to wonder if the
words dignity and Washington, DC, ever get used in the same sentence. It‟s a good question. Life in the
Washington, DC, area comes with many special issues from motorcades clogging the streets to advertisements
for obscure political issues clogging the airwaves.
Yet, little looms as strange as the parade of people (including celebrities) coming to town and then seeing who
is and isn‟t branded helpful.
So it‟s hard to know what to make of one such visit last week. It featured one of America‟s most mocked
exercise gurus, complete with his trademark curly hair, strangely upbeat voice and patriotic short-shorts leading
congressional staffers in aerobics.
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Retail Industry News from IRI
Yes, Richard Simmons stormed the Capitol in his own style and it‟s clear that he too has a dream. And,
honestly, there was little to argue with in his comments…in fact, the food industry might want to think about
embracing him.
Simmons came to Washington to talk about the increasing health problems of America‟s youth and the decline
of physical education in the schools. As Simmons told a congressional committee, No Child Left Behind was
meant to produce well rounded children. Instead, it is producing simply rounded ones.
His comments came only days after a storm whipped up over the prospect of giving various pharmaceuticals to
pre-teens to battle the early onset of so many health related problems. There may be some wisdom in doing
that, but honestly, I think Simmons makes a whole lot more sense.
Incredibly, I‟m old enough to remember gym class for all the good, bad and ugly. I remember the horrors of
dodge ball, the death-defying rope climbs, badminton, volleyball and even square dancing. The funny thing is
that when I think back on school, I remember a larger percentage of all of those classes than many others.
(And, in case you are wondering, I was blessed with an incredibly late growth spurt, which meant that I was
always one of the shortest kids in class. So I know the indignity of getting picked late for basketball and yet I
survived.)
Common sense is rarely topic number one in Washington. It‟s hardly what we‟d expect Richard Simmons to
bring, but I think he did it.
A great portion of America‟s health problems could come from simple, common sense solutions. Washing hands
is a really good thing. Handling foods properly is a really good thing. Physical education in the schools is a really
good thing. And eating as a family at home falls into the same bucket.
2008 should be glory times for the food at home industry. Consumers are worried about rising costs. Well,
eating at home helps on that. Drivers are worried about gas prices. Again, eating home really helps there.
Wait, there‟s more. Health and nutrition can both be improved by more home cooked meals as can the social
health and welfare of a family getting together around the table. Sure, there are time constraints everyone
faces, but there are also increasing numbers of solutions to help battle that problem. In short, 2008 isn‟t a
tough economic year. It‟s a year of endless opportunity.
It‟s all a matter of thinking positive. As I recall, Richard Simmons believes in that too.
And just one additional thought from the world of exercise. The Tour de France, the world‟s premier bike race
ended this past weekend and there‟s a lesson in the race for all of us. The New York Times ran an article by
one racer detailing the strategy of a teammate in racing time trials, apparently one of the hardest elements of
any bike race. The strategy is one we should all consider.
According to rider Dave Zabriskie, time trials make you “dig until you scratch the bottom, then ease off a bit
and hold it there until the finish.” In the words of his teammate, “pedal just a little bit less than the maximum
and never relent.” Sounds like a pretty fair strategy for business.
Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .
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Retail Industry News from IRI
Fresh Seasons To Double Store Count
The Minneapolis/St. Paul Business Journal reports that Fresh Seasons Market, the upscale fresh food-driven
supermarket with one store in Minnetonka, plans to open another location, in Victoria, Minnesota.
Dale Riley, co-owner and president of Fresh Seasons, tells the Business Journal that Victoria is the right place
for the company to expand. “It‟s a growth area and there aren‟t a lot of grocery stores readily available to the
people of Victoria and the surrounding communities. It‟s a good distance for people to drive and the
demographics are good for a store like ours.”
Riley is a former Lunds/Byerly‟s and Kowalski‟s Market executive, and he says that he continues to look for
other locations in the area.
The paper notes that Victoria does not have a supermarket at the moment, and that officials there have worked
closely with Fresh Seasons to bring the project to fruition.
FastNewsBeat
• Business First of Louisville reports that Kroger “has joined forces with Cellfire Inc., a mobile phone marketing
company, to offer customers coupons through their wireless devices … (Kroger) will offer the service in Georgia,
South Carolina, eastern Tennessee and Alabama. Major consumer brands that will offer coupons include Clorox,
ConAgra, Del Monte, General Mills, Kimberly-Clark and Unilever.
“To use the service, customers must link their mobile number to their Kroger Plus savings card.”
• The Chicago Tribune reports that Supervalu-owned Jewel-Osco plans to introduce a new program called
Prescription Plus that will reward pharmacy customers with a 10 percent discount on grocery purchases for every
five prescriptions filled in its stores.
• Delhaize-owned Food Lion said yesterday that it has begun a mobile marketing tour to support its launch of the
Guiding Stars nutritional labeling program.
“Along with the interactive 18-wheel trailer retrofitted in the Guiding Stars‟ signature lime green color, the entire
vehicle and crew are part of an exhibit designed to engage potential shoppers and community members in making
better food choices for proper nutrition and wellness,” the company said, noting that “the exhibit‟s exterior activity
features the „Star Sprouts Kid Zone‟ with kid-friendly activities to help educate and entertain children and their
families. With nutritious snacks to a coloring station and temporary tattoos for the younger family members, the kid
zone also provides a cool resting place for parents.”
Guiding Stars evaluates every product in the store and then awards one, two or three stars to products that meet
certain nutritional criteria for being good for you, better for you and best for you.
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Retail Industry News from IRI
The MNB Wal-Mart Watch
• Advertising Age reports that Walmart is readying what it is describing as the “second generation” of its in-store
digital TV and signage network.
According to the Ad Age, “Wal-Mart is preparing to unveil more details of its next-generation network, dubbed the
Wal-Mart Smart Network, to marketers and advertising and media agencies at dual presentations in New York and
Northwest Arkansas on Sept. 3, said a sales executive for one of its partners in the project, the analytics and
technology firm DS-IQ. He said he was otherwise sworn to secrecy on the plans.
“Another executive recently briefed on plans for the network said the concept involves moving TV screens–or
digital signage–much closer to eye level, incorporating them into product displays, and creating interactive „virtual
assistants‟ from which shoppers can get product information or refine choices in key categories such as health and
beauty aids. The idea resembles a project Wal-Mart began testing earlier this year in which it adapted Procter &
Gamble Co.'s Olay for You online recommendation engine for use in stores.”
The Balance Sheet
• Ingles Markets said that its third quarter sales increased by $96.7 million to $835.3 million, with same-store sales
up 13.3 percent. Q3 net income was up to $16.0 million.
• Drug chain Rite Aid said that its July sales decreased 0.9 percent to $1.975 billion compared to $1.993 billion for
the same period last year, as same-store sales increased 1.2 percent.
• CVS Caremark said yesterday that its Q2 earnings were $771.2 million, up from $720.1 million during the same
period a year ago. Revenue increased two percent to $21.14 billion from $20.7 billion.
• Spartan Stores reports that its first quarter profits were up 52 percent to $9.9 million, from $6.5 million during
the same period a year ago. Total Q1 sales rose almost 13 percent to $586.7 million from $520.2 million a year
ago.
The company said that Q1 net sales for its distribution business increased 5.6 percent to $298.1 million from
$282.4 million a year ago, while sales for its retail operations increased 21.4 percent to $288.6 million, from $237.8
million from last year.
Executive Suite
• Campbell Soup announced that its CFO, Robert A. Schiffner, plans to retire from his position on Aug. 3 and will
retire from the company in January 2009.
The Wall Street Journal reports that Anthony P. DiSilvestro, the company's principal accounting officer, will be
interim CFO until a search is completed for a new CFO.
• Andrew Higginson, Tesco‟s finance director, reportedly will become the company‟s chief executive of retail
services, a newly created position designed to oversee, among other things, the company‟s personal finance
business.
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